Presented with permission from Accelerated Benefits (www.accben.com)
Huge news out of the Obama Administration as they announced the delay of the Employer Mandate and Penalties from 1/1/14 to 1/1/15.
Read Delay announcement Article from Whitehouse Blog at: http://www.whitehouse.gov/blog/2013/07/02/we-re-listening-businesses-about-health-care-law
What does this mean for you? For employers, this tempers the furious effort that many of you (over 50 employee groups) will need to make. Now, rather than a 1/1/14 date for compliance, you have until 1/1/15. If you already cover employees who work 30 or more hours per week, you continue to be fine. If your eligibility is currently for employees with hours greater than 30, you are fine as well. No need to change them before 2015. The delay means that the penalties known as “shared responsibility payments” will not be collected in 2014.
What this does not mean? Health Reform is not dead. Many wonder if this marks the beginning of the end, but as of now, it is simply delayed. You may want to slow or delay your response and policy changes, but don’t throw them in the trash. As of now, they are simply changed until 2015.
What comes next? Many of us are watching to determine what happens with the 3 other major legs of the Health Reform Stool. Will they be delayed as well?
Individual Mandate: Could this be delayed next? This was ratified by the Supreme Court just 12 months ago. However, maintaining a structure that penalizes individual, every day citizens for non-compliance, while giving large employers more time to prepare, seems inappropriate. Watch for consumer groups, to organize, file lawsuits, and become progressively louder. “If Obama administration can give big business a reprieve, why don’t we get one?”
Insurance Exchanges/Marketplace (Federal and State): The law calls for these to open 10/1/13 for open enrollment, with effective dates of coverage of 1/1/14. Many, many articles have already been written about these being behind schedule. Without the employer penalty in effect, the demand for the subsidized coverage at the exchange would be all the more enticing for employers to drop their plans, and push employees to the exchanges. Because of the immense complexity to implement, and short time line, it is likely that these will be delayed as well.
Elimination of the Pre-Existing Condition: During the crafting of the Health Reform Law, there was major horse-trading among the constituent groups. Probably the most major deal involved the insurance companies. Major insurance companies agreed to eliminate pre-existing condition exclusions in health insurance plans in exchange for a strong mandate to both employers and to individuals. The logic was that insurance companies would be gaining millions of new subscribers due to the mandates, so they could sustain the increased losses of pre-existing conditions. If the mandates fall, expect HUGE push back from insurance companies, seeking to bring back the pre-existing condition exclusion, which in fact, is a necessary part of ANY insurance plan. (As a side note, the pre-existing condition exclusion was already a Non-Issue for anyone who was covered by an employer group plan, and who remained covered for 12 months or more. That same person could move from employer plan to another employer plan with no pre-ex delay.)
In Conclusion: Until additional delays are announced, you need to continue to take prudent steps to comply and implement the law, just on a somewhat delayed timeline.
Source with permission from Accelerated Benefits -https://www.instantbusinessresources.com/mail/view/f432ba4b-3f80-4d47-a82f-7743a4862f9f